Sale of Citizens South will mean windfall for its CEO

Kim Price is in line for a million-dollar payday when he sells Citizens South Banking Corp. to Park Sterling Corp. And he’s eyeing charitable and academic pursuits after wrapping up his career as chief executive at Citizens South.

Price, 56, will receive a lump-sum payment of nearly $1 million once the sale closes and he follows through with plans to step down from executive management, according to a change-in-control agreement he has with the bank. The arrangement, a common practice for executives, calls for Price to receive three times his annual salary and cash bonus in a one-time payment if the company is sold. His employment contract also calls for him to receive more than $700,000 in a retirement benefit payout, according to the Gastonia-based bank’s latest proxy filing.

In addition, Price is in line for a windfall as the largest individual owner of the bank’s stock. After spending 15 years at Citizens South, he has accumulated more than 320,000 shares, valued at about $1.6 million before the agreement with Park Sterling was announced Monday. But Park Sterling has agreed to pay a 35% premium on those shares, making Price’s holdings worth about $2.2 million.

Charlotte-based Park Sterling announced Monday it plans to buy Citizens South in a deal valued at $77.8 million. It will make Park Sterling the largest community lender in the Charlotte metro area. The acquisition is slated to close later this year.

Price is credited with steering Citizens South through tumultuous times, managing to grow the bank at a time when its peers lacked capital to expand.

He accepted a $20.5 million government bailout in 2009 to prop up Citizens South amid a sinking real estate market. But unlike other bankers, Price turned the bailout into a public-relations victory by creating a mortgage program with the additional capital. He offered reduced interest rates to homebuyers if they agreed to purchase inventory from builders and developers Citizens South had financed — a clever tactic designed to help the bank’s construction and development borrowers unload properties as the market crashed.

Price will join the board at Park Sterling and serve as a consultant as the bank looks for more acquisitions, he says. He also plans to remain active in trade associations. Long term, he says financial literacy has caught his eye. He’s entertaining the idea of establishing a foundation promoting financial education.

“After watching what unfolded during the recession, I have felt like financial literacy is a huge concern — and I’m not sure the government can fix it,” Price says. “The people have to solve this problem and learn to make good decisions with our finances.”